Cost and Time Control

1. Cost and Time Control

2. Project completed on time and on budget • Want to get done early • Lower costs • More profit

3. Cost Control • Use cost codes assigned to items during estimating • Cost codes allow PM to monitor costs and compare to estimated costs • Want total project under budget

4. Cost Control • Uses of actual data • Monitor costs, id problem areas, select mitigation measures • Id additional costs incurred thru change in scope • Id costs for completing work that was subbed out (back charges) • Develop a database of historical data for estimating future projects • Provide a cost report to owner

5. Cost Control • Steps involved • Assign cost codes to each element of work in cost estimate • Correct estimate based on buyout costs • Actual costs are tracked using cost codes • Construction process is adjusted to reduce cost overruns • Actual quantities, costs, and productivity rates are recorded and as built estimate is prepared

6. Cost Control • Greatest risk items • Direct labor • Equipment usage or rental • Job site overhead or project admin • Need detailed cost analysis to see where overruns are

7. Cost Codes • Need to be able to track actual vs estimated costs • Use same coding as on files • Many companies use CSI MasterFormat system • Proj #.CSI Workpackage.element of cost • 1 = labor, 2 = equipment, 3= materials, 4 = sub • 9821.06100.1 – labor for rough carpentry on Huna Office Bldg

8. Accounting • Usually done at home office • All cost items have cost code • Must be right cost code even if it means you go over budget on item • Only way to truly track how you are doing

9. Work Packages • Method of breaking down estimate into distinct packages or systems that match measurable work activities • Footings including forms, rebar, pour is a work package • Get supers involved in estimating the work packages that they will oversee

10. Project cost curve • Graph showing estimated labor vs actual labor • Actual Labor under estimated => either beating estimate or behind schedule • Actual Labor over estimated => either over estimate or ahead of schedule • Track those activities which are critical or carry the highest labor • F16-4 work package cost control

11. Management reports • Need to develop a monthly forecast for project • Direct labor, direct material, major purchase order items, subs, job site admin, equip rental, {taxes, permits, insurance}, Fee • Each gets a separate page with a 1 page summary of project • F 16-5 • Need to keep on top of costs

12. AS Built estimate • Important historical tools • Especially important on unit price estimates

13. Schedule control • Monitoring progress of each activity • Determine impact of delayed activities on completion • Need to ensure substantial completion by contract date • Should do an as built schedule - historical

14. Earned value • Technique for determining estimated and budgeted time of work completed to date • On work package curve put in curves for actual man-hours and earned value • Earned value = man hours worked time % complete F16-6,7 • Gives a measure of productivity • Subtract actual time used from time scheduled – horizontal dist • Subtract actual cost from earned value of work performed – vertical line